By Jorge Otaola
BUENOS AIRES (Reuters) – Argentina and the International Monetary Fund (IMF) are zeroing in on an agreement for more flexible currency reserves targets this year dependant on the South American country’s exports, a government source told Reuters on Friday.
The indebted country, an important grains exporter, is going through a severe drought that is battering its soybean, corn and wheat harvests as well as exports hopes, a blow to government plans to rebuild depleted dollar reserves.
Argentina and the IMF established targets that included rebuilding reserves in a $44 billion debt deal struck last year, which replaced a program that failed to keep the country from slipping into economic crisis.
However, the impact of the recent drought and high prices linked to the war in Ukraine, have led to talks over easing the reserves targets for this year.
“They are finalizing reserves goals for the year, with scenarios of a fall or increase in exports,” said the government source, asking not to be named as the talks were ongoing, adding there was no set date yet for an announcement.
The economy ministry declined to comment.
The IMF did not immediately respond to a request for comment.
Argentina’s central bank net foreign currency reserves currently stand at some $4.4 billion, according to private analysts.
Under the latest IMF review, Argentina had targeted net reserves to increase by a cumulative $5 billion by the end of 2022, $5.5 billion at the end of March and $9.8 billion at the end of this year.
Argentine officials went to Washington last week for IMF talks over the latest review of the country’s extended fund facility program for the fourth quarter of 2022. Approval is needed to unlock a $5.3 billion disbursement, key to make repayments to the IMF for a similar amount in March-April.
(Reporting by Jorge Otaola; Editing by Adam Jourdan and Josie Kao)
